Whose Fault Is It Anyway? The Coming Obamacare Blame Game

With <em>King v. Burwell</em>, the Supreme Court once again has the future of the Affordable Care Act in its hands.

Microphones are set up in front of the U.S. Supreme Court, June 30, 2014 in Washington, DC.
National Journal
Dylan Scott and Caitlin Owens
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Dylan Scott and Caitlin Owens
June 21, 2015, 4 p.m.

It’s go­ing to get messy if the Su­preme Court rules to in­val­id­ate Obama­care’s fin­an­cial aid in more than 30 states that use the fed­er­al Health­Care.gov. Every­body will blame every­body else.

Many Hill Re­pub­lic­ans will say that it’s the White House’s fault: Obama and Demo­crats passed this flawed law, with no GOP votes. They should reap the con­sequences.

The Obama ad­min­is­tra­tion has long said that it can’t fix any­thing in the Af­ford­able Care Act without con­gres­sion­al help. All it would take is a one-sen­tence bill, which Re­pub­lic­ans aren’t go­ing to do. Will the GOP really leave mil­lions of Amer­ic­ans on the hook with such an easy solu­tion on the table?

The states seem to be hop­ing that nobody looks their way, though they too have an an­swer with­in their grasp. Wis­con­sin Gov. Scott Walk­er ex­em­pli­fied that line of think­ing when he said that this was a prob­lem cre­ated by Wash­ing­ton—so Wash­ing­ton can deal with it.

Here’s your guide to mak­ing sense of the spin in King v. Bur­well.

CON­GRESS

What it could do: Pass a bill.

The simplest op­tion would be to amend the Af­ford­able Care Act to say spe­cific­ally that all ex­changes are eli­gible for sub­sidies, a fix which Obama him­self has ad­voc­ated. “Con­gress could fix this whole thing with a one-sen­tence pro­vi­sion,” the pres­id­ent said earli­er this month.

It could also pass a sep­ar­ate law ex­tend­ing some form of fin­an­cial as­sist­ance to those cur­rently re­ceiv­ing sub­sidies, while ex­tract­ing some fur­ther con­ces­sions from Demo­crats to craft Obama­care more to their lik­ing. Most of the GOP plans that have been pro­posed do this: Sen. Ron John­son’s bill, for ex­ample, ex­tends the sub­sidies while re­peal­ing the law’s em­ploy­er and in­di­vidu­al man­dates.

In the­ory, Con­gress could also pass a full “re­peal and re­place” law, gut­ting Obama­care and es­tab­lish­ing an en­tirely new health care sys­tem in its place. But Obama’s veto pen looms.

Why it will act: Be­cause no one—Demo­crat or Re­pub­lic­an—wants mil­lions of people to lose their health cov­er­age. Mor­al­ity aside, the fal­lout could also have polit­ic­al con­sequences if the pub­lic blames the GOP for the law­suit and/or Con­gress for fail­ing to act. Neither party wants it held against them in the 2016 elec­tion.

Why it won’t: Be­cause the fierce par­tis­an­ship that has al­ways sur­roun­ded Obama­care will pre­vent any solu­tion from be­ing passed. Re­pub­lic­ans will re­fuse to do a simple fix, be­cause that would mean al­low­ing Obama­care to con­tin­ue as is, and Demo­crats won’t con­cede cent­ral ele­ments of the le­gis­la­tion.

THE AD­MIN­IS­TRA­TION

What it could do: To be de­term­ined.

The ques­tion of how much free­dom the ad­min­is­tra­tion has to act is already con­tro­ver­sial. The White House has in­sisted from the be­gin­ning that there wouldn’t be an easy ad­min­is­trat­ive fix.

“We can’t undo the massive dam­age,” Health and Hu­man Ser­vices Sec­ret­ary Sylvia Math­ews Bur­well said re­cently.

But some out­side ob­serv­ers have the­or­ized that the ad­min­is­tra­tion could ac­tu­ally do a lot to clean up the King mess on its own (and has been hid­ing its cards to pres­sure the Court).

The spe­cif­ics vary, but the hy­po­thet­ic­al plan looks something like this: HHS makes it as easy as pos­sible for states to “es­tab­lish” an ex­change and re­start the sub­sidies. Maybe the gov­ernor just signs a piece of pa­per; maybe the ad­min­is­tra­tion “rents” Health­Care.gov to them.

Nich­olas Bagley, a law pro­fess­or at the Uni­versity of Michigan who sup­ports the White House’s view of the case, even the­or­ized that the ad­min­is­tra­tion could in­ter­pret many states to have already “es­tab­lished” an ex­change without do­ing any­thing ad­di­tion­al.

Why it will act: Be­cause it would al­low the White House to avoid ne­go­ti­at­ing with Con­gress and giv­ing up con­ces­sions, or risk­ing that law­makers fail to act.

Why it won’t: Be­cause it leg­ally can’t. The ACA de­tails some very spe­cif­ic things that states need to do to es­tab­lish an ex­change, and HHS might not have the in­ter­pret­ive lee­way. Plus, it would re­quire buy-in from the af­fected states, the ma­jor­ity of which are con­trolled by Re­pub­lic­ans.

THE STATES

What they could do: Set up an ex­change.

The King case is a prob­lem for the ad­min­is­tra­tion only be­cause not every state es­tab­lished its own ex­change, as many ini­tially as­sumed they would. If states that don’t already have ex­changes de­cide to set one up, the sub­sidies start flow­ing again.

The de­tails are a big prob­lem: Will the ad­min­is­tra­tion make it as simple as pos­sible? Do states have enough time to act be­fore the sub­sidies ex­pire? Could gov­ernors take ex­ec­ut­ive ac­tion, or would state le­gis­latures have to hold spe­cial ses­sions?

But every­body, op­pon­ents and sup­port­ers alike, agrees that state ex­changes au­thor­ize the sub­sidies.

States’ op­tions also de­pend on wheth­er and how the Court defines a state-based ex­change. They might also be able to lease the fed­er­al ex­change tech­no­logy, or cre­ate re­gion­al ex­changes, or even use 2017 waivers es­tab­lished by the ACA to cov­er many of the same people.

“Un­less the Court is very pre­script­ive about what is or is not state-based, there will be room to man­euver here,” said Dan Crip­pen, ex­ec­ut­ive dir­ect­or of the Na­tion­al Gov­ernors As­so­ci­ation, speak­ing at a brief­ing on the case.

Why they will act: Be­cause they don’t want their res­id­ents to lose sub­sidies and then blame them for fail­ing to act—par­tic­u­larly if HHS stream­lines the pro­cess as much as it can. A num­ber of states have re­portedly met privately to dis­cuss team­ing up for a re­gion­al ex­change.

Delaware and Pennsylvania have already had ap­plic­a­tions ap­proved by HHS to es­tab­lish their own ex­changes if the King plaintiffs win. New Hamp­shire is float­ing a “ma­gic wand” bill that would simply de­clare its ex­change, cur­rently be­ing run through Health­Care.gov, to be a state-based ex­change.

Why they won’t: Be­cause of polit­ics and/or prag­mat­ics.

The deep­est-red states aren’t likely to do any­thing that le­git­im­izes or per­petu­ates Obama­care.

There is also the ques­tion of wheth­er they have enough time to act. The justices could stay a de­cision, but, at best, states might just have a few months to do something—which could re­quire, say, a spe­cial le­gis­lat­ive ses­sion. All of which just puts a solu­tion farther out of reach.

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